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Amazon.com Inc. has been in talks with several Homeland Security Department component
agencies in the hopes of striking deals to sell AmazonFresh groceries to federal immigration
detainees and provide lockers at airports, according to an email obtained by Bloomberg
Government.

DHS has started buying goods through Amazon Business by way of a centralized agency
account. This occurred after Amazon
alerted DHS in April 2016 that agency officials already had thousands of separate accounts
with Amazon and Amazon Business, the company’s business-to-business unit.

Amazon is now seeking to grow its relationship with DHS in a variety of ways, according
to 114 pages worth of emails
obtained in response to a Freedom of Information Act request from Bloomberg Government that
sought answers to two earlier FOIA requests filed by government contracts consultants
Larry Allen, president of Allen Federal Business Partners, and Ray Bjorklund, president
of BirchGrove Consulting.

“I’m not saying it’s good or bad,” Bjorklund told Bloomberg Government regarding an
expanded relationship between Amazon and Homeland Security. “But I hope DHS spends
enough time thinking about this to ensure openness and transparency.”

The fact that Amazon might be first to the market with novel ideas, while possessing
a powerful platform, “shouldn’t close the door to competition,” Bjorklund said.

DHS officials also have found that workers at the Federal Emergency Management Agency,
and apparently other DHS components, have been making purchases with their own credit
cards for personal use — against DHS policy, the email trove revealed.

‘Fresh Food Deliveries’

Using an account to buy goods wasn’t the only way DHS could benefit from a relationship
with Amazon, Amazon Business executive Kelly Gegich wrote in a March 10, 2017, email
to a DHS official named Robert—the rest of his name was redacted.

“We’ve heard from a variety of components about their interest in other services that
Amazon provides,” Gegich wrote.

According to Gegich, they include:

Amazon Lockers: Described as “self-service delivery locations” that “could be utilized
by [the Transportation Security Administration] at airports, etc.”;

An Amazon Campus/Store that “[c]ould be co-located on DHS compound or anywhere that
an Amazon physical presence is located”; and

“And so many more…” wrote Gegich, who couldn’t be reached for comment.

Amazon spokeswoman Lori Torgerson declined to comment on the status of the project
ideas mentioned by Gegich.

“We regularly communicate with a variety of Amazon Business customers regarding opportunities
to leverage our consumer offerings in their own business environments,” Torgerson
told Bloomberg Government in a written statement.

Competitive Concerns

The notion of AmazonFresh delivering groceries to ICE detainees could quickly raise
several issues for the agency.

There’s the issue of price — concerns about high-end grocery runs being made to federal
immigration detainees — and whether such a deal would be in the best interest of taxpayers.

In the wake of Amazon’s purchase of Whole Foods, the AmazonFresh delivery service
reportedly boasts more than 800 items from Whole Foods’s in-house brand. Though Whole
Foods’s prices generally have decreased in recent weeks, according to reports, the
chain has consistently suffered a reputation as offering overpriced groceries.

Amazon’s competitors have raised concerns about early versions of the online marketplace
provision in the National Defense Authorization Act. The concerns that Amazon unfairly
stands to benefit with the lion’s share of profits could be raised again, Bjorklund
said.

There’s a risk in turning one or more of these ideas into a “monopoly situation,”
he said.

Discouraging ‘Rogue Spend’

The FOIA documents include several exchanges in which questions were raised about
workers using their own credit cards to pay for items off of Amazon Business’s DHS
account for their “personal use.”

In one April 10 email exchange that appears to be between several DHS officials —
with some of the names redacted — a DHS accountant named Marie Beatriz Dreuth was
asked, “Can Amazon Business be used to make purchases using their personal credit
card?”

A second official, whose name was redacted, responded, “No, they can’t use AB for
personal purchases using their credit card.”

This prompted the first official to reply, one minute later, “I did not think so.
But I have discovered that folks are using their personal credit cards.”

In a separate exchange that day, an unnamed DHS official asked Peter Donnelly, who
appears to be a Chicago-area based Amazon official, whether there was a “plan or process”
to deal with the issue. Donnelly suggested that DHS officials reiterate that all purchases
are visible to DHS management.

Usually that “discourages rogue spend as customers do not want their personal shopping
habits being reviewed by their employer.”

A DHS spokeswoman didn’t respond to questions by deadline.

Becoming a Player

The FOIA emails make clear that some DHS officials have balked at the increased role
of a private company like Amazon taking over what used to be governmental functions.

An unidentified DHS official expressed concern in a February email exchange about
complying with the Trade Adjustment Assistance Reauthorization Act of 2015. At the
same time, the official broached a broader concern:

“We are worried about TAA compliance, sourcing concerns, amongst other things,” the
official wrote, “and didn’t think that Amazon would ever be a player in the Government
space.”

To contact the reporter on this story: Sam Skolnik in Washington at
sskolnik@bgov.com

To contact the editor responsible for this story: Daniel Ennis at
dennis@bgov.com

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